Operations management or OM is the department or group that plans, supervises, and controls production. Their job description often includes oversight of service delivery, as well. Operations management is found in almost every industry and nearly all companies. Yet few people appreciate how essential this discipline is until something goes wrong, whether there is a shortage of masks in a hospital to retail goods going out of stock. Here are 5 reasons why operations managers play such an important role in a company.
Operations management is generally responsible for product quality. Quality control often works for operations, verifying that items coming off the assembly line are good enough to ship to customers or assemble in the next higher assembly. Operations management is responsible for all the variables that affect quality from keeping equipment calibrated to training people working on the shop floor. When operations management prioritizes quality, you get a higher quality product.
Operations management is directly responsible for day to day operations. It should ensure the proper staffing level for every operation so that the entire organization is as efficient as possible. They’re also responsible for supplying people with the parts and training they need to do their job effectively.
If operations management does a good job, you’ll see improvements in productivity. Greater productivity tends to result in improved profits since you’re getting more done with the same investment of labor and materials. The best operations managers will know how to reduce operating costs without cutting into the muscle of your organization. They’ll also know how to reduce waste in all its forms.
You can’t manage a company long-term demanding overtime and 120% effort from your staff. They’ll burn out and quit. This is why proper operations management is essential to employee morale. If you succeed, you’ll get higher productivity out of your staff without having to get people to work harder or longer.
Your competition is going digital, and you need to keep up if you’re going to keep your customers. Digitization refers to the adoption of digital, real-time information systems.
These systems allow people to watch streaming media whenever they like or your customers to track their product as it moves through the postal system. Several companies are trying to give their customers greater insight into their operations. Allowing them to track the status of their order before it hits the shipping dock gives them greater confidence they’ll get their order on time.
Digitization can also take the form of greater automation. Automated inspection systems can be used instead of relying on people to check the dimensions of a final product, for instance. Automated data collection and reporting have become commonplace, including data flooding in from equipment on the shop floor. Automation and digitization can influence human resources, as well. You can give employees the ability to set their schedules or change tax withholding information through an online portal. This reduces overhead costs while improving the quality of service.
If you want to learn more about the impact of digitization on the industry, we strongly suggest you read this article. Not only does it touch on how digitization is transforming the world of operations management, but also lays out some of the skills operation managers of the future will need to survive and thrive
Shipping poor quality products will hurt your company’s brand reputation. However, operations management influences customer opinion in a variety of ways.
How your staff treats customers placing orders or returning defective items will have a direct impact on their opinion of your organization. If operations management implements a quality management system, ensuring that all of your operations are customer-focused, you’ll provide both the product and service level your customers expect. This could help your company exceed customer expectations.
This will lead to high customer reviews online that will attract new customers. Furthermore, meeting and exceeding customers’ expectations is one of the best ways to create a long-term customer relationship. It is far cheaper to keep current customers happy than work to attract a constant stream of new ones.
A well-managed operation will also prevent the gaps in customer service that cost you money. The most obvious example is when you run out of inventory. If you don’t have enough product to keep up with customer demand, you will miss out on those potential sales. If you don’t have enough employee capacity to deliver the requested services, you can’t bill for those services, either. If the customer has to wait to receive the product or service, they may go somewhere else.
In many industries, your product and the processes behind it must comply with various government and industry regulations for you to stay in business. For example, a food processing plant that isn’t clean enough won’t be allowed to continue operations. This is another reason why operations managers play such an important role. They are the ones with the finger on the pulse and have a clear understanding of both production and compliance objectives.
But operations management affects business in so many other ways, like on finance for instance. Finance managers have to oversee budgets and balance them, and those with a solid background in operation management have a greater understanding of how their decisions relate to processes. For instance, if a OM asks for funds in order to de-bottleneck a process, someone with an understanding operations management will be able to know exactly why and how the funds will be used. They could even offer some recommendations themselves. This is why understanding or having experience in operations management is more prized than ever at every level.
Operations management is responsible for the day to day operations of the company. The success and even the survival of the firm depend on having it done well, and its importance will only continue to grow.